The U.S. median income is around $75,000, with half of Americans earning less than that. High-income earners, on the other hand, can make 10 times that – or more. This top 1% also makes up a disproportionately large part of the tax base, with their incomes generally putting them in the highest federal tax bracket rate at 37%.
While state and local level taxes may impact the spread of high earners in those areas, the cost of living can also be drastically different nationwide. As a result, what it takes to be considered a top 1% income earner can differ by more than$500,000 from state to state.
With this in mind, SmartAsset ranked states based on the minimum pre-tax income needed to be considered a top 1% earner, based on the latest IRS tax return data.
To determine the income needed to be in the top 1% of earners in each state, SmartAsset reviewed 2021 data from the IRS for individual tax filers. Figures were adjusted to June 2024 dollars using the Bureau of Labor Statistics' Consumer Price Index for All Urban Consumers (CPI-U) U.S. city average series for all items, not seasonally adjusted.
This story was produced by SmartAsset and reviewed and distributed by Stacker Media.